The Crafar farms are going to the Chinese. The government has confirmed that the 16 Crafar farms will be going to the Shanghai Pengxin group which the Labour Party says is aligned with the Chinese government.

Land Information Minister Maurice Williamson says it is clear that all criteria of the Overseas Investment Act have been met and that the government would approve the OIO’s recommendation to approve the bid.

Mr Williamson says Shanghai Pengxin will have to meet strict conditions including investing $14 million into the farms to make them more economically and environmentally sustainable.

In particular the work will protect the Nga Herenha and Te Ruaki pa sites and improve walking access to Pureora Forest Park and Te Rere falls.

On-site training facilities for dairy farm workers will also be established the Minister said. 

These conditions of sale will be policed by the OIO.

State-farmer Landcorp will run the 8500 hectares of dairy farms which are spread throughout the North Island on behalf of the Chinese group.

The decision came just four days before the receiver’s deadline for the Shanghai Pengxin group’s bid to be approved expired on January 31.

Shanghai Pengxin applied for permission to the Overseas Investment Office to buy the farms in April 2011, and the OIO made its recommendation to government late last week.

Rival bidder Sir Michael Fay began challenging the decision this week in the High Court in Wellington, seeking a judicial review of proceedings, saying his consortium was 'preparing for the worst'. 

Star Public Relations' Alan McDonald, spokesman for Sir Michael Fay says what they believe is that the OIO hasn’t applied the Act properly.

"The Act is quite specific in that it says the buyer must have expertise and business acumen relevant to the investment.

"In this case the 99% shareholder and sole director of the company that is buying the farms, or trying to buy the farms, is a Shanghai property developer.

"Now I don’t think that fits the criteria for having relevant experience in dairy farming in the central North Island."   

After negotiations in the court this week Shanghai Pengxin agreed not to finalise any deal until Friday, February 3, allowing the Fay group to challenge the sale according to media reports. 

Last year a bid by another Chinese group, Natural Dairy, for the Crafar farms was rejected by the government which ruled the people in charge of the company failed New Zealand’s good character test for investment.

Three executives of the company including founders Jack Chen and May Wang have since been arrested by Hong Kong authorities and face multiple fraud and corruption charges. 

This week Labour Party leader David Shearer told Country99TV it was vital the Crafar farms stayed in New Zealand hands.

Mr Shearer said there was no benefit to New Zealand from the Shanghai Pengxin bid.